News Item

Foreign Funds Flow To U.S. Think Tank

August 2, 1998

On Capitol Hill one day in late February 1995, a subcommittee on Asia and the Pacific heard testimony from Edwin J. Feulner Jr., the president of the Heritage Foundation. The witness praised South Korea as a key ally of the United States and urged closer cooperation between Washington and Seoul. And he criticized the Clinton administration for being too conciliatory toward the regime in North Korea.

Feulner’s testimony was unremarkable, except that it did not mention a pertinent fact: His organization was in the midst of receiving large amounts of money from the South Korean government.

From 1993 through 1995, Heritage took in a total of $1 million from the Korea Foundation — “funded by South Korea’s Foreign Ministry” — the Wall Street Journal reported on Aug. 10, 1995. The newspaper added that the Korea Foundation “is an affiliate of the South Korean government, according to Yoo Lee, a spokesman for South Korea’s embassy” in Washington.

The nation’s capital, of course, is a place where double standards are routine. But consider this recent feat of ultra-hypocrisy: A few weeks ago, on July 14, the Heritage Foundation issued a report condemning lax compliance with a congressional rule that requires witnesses to disclose funding from the U.S. government.

The “Truth in Testimony” rule — first proposed by Heritage in May 1995 and adopted by the House of Representatives in January 1997 — seems intended to stigmatize grants from the public sector. Heritage hails this as a “significant victory” because the rule “helps expose potential conflicts of interest: witnesses who testify for greater federal spending on programs that provide them with income.”

Eager to tighten the rule, Heritage has even issued report cards that grade enforcement by House committees and single out non-disclosing groups. Among the culprits fingered by the Heritage Foundation are witnesses from such outfits as the United Brotherhood of Carpenters (federal grant: $33,611), the Wildlife Society ($25,000), the Passaic River Coalition ($24,000) and the American Dental Association ($3,592,256).

But what happens when an American organization pockets $1 million from a foreign government — and testifies repeatedly in front of Congress about what U.S. policy should be toward that government — without disclosing the financial ties involved? Hey, no problem.

To make the irony more acute, the “Truth in Testimony” rule championed by Heritage requires that witnesses who appear before House committees disclose federal grants received not only during the current fiscal year but also during the previous two fiscal years.

If the words “foreign-government grants” were substituted for “federal grants,” then Heritage would have been in repeated violation of the rule during the past few years.

On March 19, 1996, a senior fellow at the Heritage Foundation’s Asian Studies Center, Daryl M. Plunk, testified on “U.S.-North Korean Relations” before the Subcommittee on Asia and the Pacific of the House International Relations Committee.

Plunk had a lot to say about diplomacy between the United States and North Korea. He fretted aloud that White House policies were doing grave injury to the South Korean government.

From the witness table, Plunk made an impassioned plea for the U.S. government to toughen its stance toward North Korea before proceeding with an “Agreed Framework” between the two countries. “A special envoy should seek regular contacts at the highest levels in Pyongyang to press for resumption of dialogue,” Plunk declared. “He should make clear to the North that the U.S. will no longer tolerate delays and that the fate of the Framework process hinges upon North Korean cooperation.”

The witness from the Heritage Foundation was adamant: “If this message is not hammered home to Pyongyang forcefully and regularly, the North will continue to doubt America’s resolve and misjudge its intentions. The envoy should coordinate closely with Seoul and also meet with Chinese, Japanese and other concerned parties to enlist their support and engagement.” But Plunk never got around to mentioning the Heritage Foundation’s big-money link to the South Korean government.

Larger quantities of cash keep flowing to Heritage from private industrialists in Asia who back Heritage’s Asian Studies Center in Washington. A laudatory new book about the Heritage Foundation, “The Power of Ideas” by Lee Edwards, states that Heritage established its Asian Studies Center in 1982 and raised an endowment for the center of “more than $13 million over the next decade and a half, almost all of it from South Korean, Taiwanese and other Asian foundations and corporations.”

A key media strategist at Heritage, public relations counsel Hugh Newton, told me two years ago that funding from overseas was no cause for concern: “As for Asian money, it comes from corporations with many of the same interests as our American corporate contributors.”

The Heritage Foundation continues to testify on Capitol Hill about Korea-related issues without noting its recent financial ties to the South Korean government. On Feb. 24, Heritage policy analyst John P. Sweeney was a witness at a hearing on the Asian financial crisis. He told the House Ways and Means subcommittee on trade: “We can assume that South Korea is going to do the right thing. Certainly they appear to be moving in the right direction.”

Heritage calls itself “the most influential think tank in the most important city in the most powerful nation in the world.” Even allowing for hyperbole, the 25-year-old institution wields enormous influence. Before Newt Gingrich became House speaker, he proclaimed that “Heritage is without question the most far-reaching conservative organization in the country in the war of ideas.”

Since the Republicans became the majority party in Congress at the start of 1995, the Heritage Foundation — by its own account — has been able to do much more than simply testify in front of committees and huddle with individual members. Heritage’s annual report for 1995 included a colloquy between two of the organization’s vice presidents, extolling the think tank’s boosted influence at the Capitol.

“Heritage has been involved in crafting almost every piece of major legislation to move through Congress,” said Stuart Butler. The other vice president was no less glowing in his assessment. “Without exaggeration, I think we’ve in effect become Congress’s unofficial research arm,” said Kim Holmes, who added: “We truly have become an extension of the congressional staff, but on our own terms and according to our own agenda.”

Norman Solomon is executive director of the Institute for Public Accuracy, a nationwide consortium of policy researchers. The institute’s offices are located in San Francisco and Washington, D.C.